Fighter jets: Government will get best value for tax dollars

Defence Minister Peter MacKay and Public Works Minister Rona Ambrose take part in a news conference in Ottawa regarding the purchase of the F-35 fighter jets last week. (THE CANADIAN PRESS)

The men and women of the Canadian Armed Forces need the tools to do their jobs. These tools are expensive, and buying them is often a complex process involving numerous federal departments. We must ensure that public money is well spent, military needs are met, and jobs are delivered for Canadian workers.

The Forces need fighter jets to keep Canada safe and to safeguard global security. Since the early 1980s, the Royal Canadian Air Force has been flying the CF-18 to defend our sovereignty, protect North American territory and contribute to international military missions. As shown in the recent NATO mission over Libya, fighter aircraft can protect innocent civilians and, as proven in Afghanistan, air superiority saves our soldiers’ lives. The CF-18s were controversial when purchased, but have served Canada well and will need to be replaced within the next decade.

In 2010, Public Works Minister Rona Ambrose, Industry Minister Tony Clement and I announced our government’s intent to pursue a replacement aircraft for the aging CF-18. We said we would spend $9 billion, including contingency, to buy 65 aircraft, plus spare parts and weapons.

Later in the process, we also advised the public of the estimated cost of aircraft maintenance over a 20-year period. These two investments — buying the planes and maintaining them — would be new expenditures. Of course, we would continue to spend on things such as pilot salaries and fuel to operate these new aircraft, just as we do with our current fleet. These operating costs are paid today and they will continue to be paid no matter what fighter aircraft Canada buys.

Some have questioned why we costed the replacement fighter program over 20 years and not longer. Simply put, past governments and leading officials have considered 20 years to be a period over which costs could be predicted with confidence. In 2001, Alan Williams, the official then in charge of procurement at National Defence, stated, “Rather than find ourselves in a position where we buy something that looks like a good deal, only to find out that the incremental long-term support costs escalate dramatically, we are saying no, not this time. We want to know the full cost for 20 years.” In 2004, when the former Liberal government announced the Maritime Helicopter Project, they signed off on a 20-year in-service support contract. Earlier this year, the secretary of Treasury Board stated, “All of the submissions to date that have been presented to the Treasury Board have used a 20-year cost estimate.” So, in estimating program costs over 20 years, we were following the accepted practice for major military purchases.

To date, we have not spent a single penny to acquire new fighter planes.

Earlier this year, the auditor general of Canada recommended we “provide the actual complete costs incurred throughout the full life cycle of the F-35 capability.” Our government agreed and we are following a seven-step plan to implement the recommendation before spending any of your tax dollars on buying fighter aircraft. On Dec. 12, we presented our results to date, this time estimating costs over 42 years. Never before has a government presented estimates in such a comprehensive, transparent and long-term way. These estimates are big numbers. Forty-two years is a long time.

The new estimates for the fighter plane replacement program are just that — estimates. KPMG, a world-class financial firm, says, “Life-cycle costing is fundamentally a forecasting activity and is therefore imprecise, uncertain and highly sensitive to many factors that may be difficult to quantify at the time when the life-cycle costing is developed.” Our estimates will become more definitive as we move forward and we will report revisions to you every year.

To ensure we are getting maximum value for your tax dollars, our government also announced our intent to open up this procurement and look at all viable alternatives for a replacement aircraft. We can do so now because absolutely no taxpayer money has yet been spent on acquisition costs for a replacement. The F-35 remains one of the alternatives to replace our current fleet of aging fighter jets.

Regardless of what aircraft we end up buying, the purchase cost will be no more than $9 billion. That is the maximum acquisition price ministers Ambrose, Clement and I announced in 2010, and that has not changed.

Our government has changed how major military procurement costs are presented to Canadians. We are making the CF-18 replacement process more transparent and rigorous. We will safeguard your tax dollars as we equip our airmen and airwomen with the tools they need.